The financial regulator said in March that UK banks must raise £25 billion of extra capital by the end of the year to absorb any future losses on loans. There is speculation that Co-op's shortfall could be in the region of £700 million to £750m.

Telegraph's Banking editor Harry Wilsonsaid most of the risk stems from loans Co-op took on via its acquisition of the Britannia Building Society in 2009.

He questioned why the bank was only now recognising the losses, when other several other banks had taken them over a number of years.